After listening to three hours of arguments from Microsoft and Motorola in a patent dispute today, a federal judge in Seattle deferred his rulings on the motions before him but leveled sharp criticisms at both companies in the case.
“The court is well aware that it is being played as a pawn in a global industry-wide business negotiation,” said U.S. District Judge James Robart at the conclusion of the hearing.
He continued, “The conduct of both Motorola and Microsoft has been driven by an attempt to secure commercial advantage, and to an outsider looking in, it has been arbitrary, it has been arrogant and frankly it appears to be based on hubris.”
The judge’s remarks reflect a growing sense of frustration among the general public and technology users about the patent battles being waged by the giants of the tech industry. In defining hubris, Judge Robart made a reference to Antigone, the Greek tragedy by Sophocles, comparing the companies to Creon when he refused to allow Polyneices’ body to be buried.
The judge said his statements were “not an indictment of the lawyers,” but rather “an indictment of the philosophy of the companies.”
He concluded, “When the chess game is over, the pawn and the king go back in the same box. You should think about that.”
Microsoft contends that Motorola made an unreasonable demand when it sought royalties of 2.25 percent on sales of products including Xbox 360 and Windows PCs in exchange for rights to Motorola video and wireless patents considered essential to industry standards. Microsoft says the royalties could add up to some $4 billion a year.
Countering that argument in court today, Jesse Jenner, a lawyer for Motorola, argued that Microsoft should have responded to the demand by entering into negotiations, rather than filing a lawsuit.
Jenner said of Microsoft, “They preferred litigation, for strategic reasons, over engaging with Motorola.”
But after citing the text from Motorola’s original letter, the judge said, “You’re telling me that’s an invitation for negotiation? Sounds to me like it’s an ultimatum.”
Robart’s closing remarks were far from his only zingers of the morning. Earlier in the hearing, the judge had said he could take “judicial notice of the fact that the legal fees in this matter could finance a small country.”
The case is part of a larger saga playing out in the courts and the industry. Google, one of Microsoft’s biggest rivals, is in the process of acquiring Motorola for $12.5 billion. Microsoft has separately been engaged in a successful campaign to collect royalties from makers of devices that use Google’s Android operating system, alleging that Android violates its patents.
Complicating matters is a separate case proceeding before a court in Germany, which ruled last week that Microsoft violated two of Motorola’s digital video patents, ostensibly allowing Motorola to block Microsoft’s sale of Xbox and Windows PCs in the country. However, an earlier temporary restraining order from Robart currently prevents Motorola from acting on the German court’s decision.
On the subject of why Motorola filed the separate suit in Germany, Motorola lawyer Jenner told the judge, “Don’t forget they started this, we didn’t start this.”
“Spare me that argument,” the judge replied.
The lawyer replied that he didn’t want the judge to think “we were out there in the woods with rifles.”
Robart also questioned Microsoft’s actions in filing the suit, rather than negotiating. He said, “What good faith is there in saying, ‘You know what, we don’t want to play in your sandbox, we’re going to sue you?’ ”
Microsoft lawyer Art Harrigan responded that the judge’s statement assumed Motorola was acting in good faith, which Microsoft alleges it wasn’t.
The judge deferred his rulings in the case, giving him time to consider the arguments and issue a written ruling.
However, he said he was inclined to deny Microsoft’s motion that Motorola breached its agreement to offer its patents on fair and reasonable terms, and also to deny Motorola’s motion contending that Microsoft repudiated its rights to fair and reasonable terms on the patents when it filed the suit.
The ultimate effect of Robart’s remarks today may be to intensify the settlement talks between the companies, if for nothing more than to avoid such scoldings in future hearings, or worse, a future trial full of them.
Barring a settlement, the judge said, the case will result in “six good citizens of the Pacific Northwest” deciding on the royalty that Microsoft will pay. If it happens, the trial is scheduled to take place in November.